Hedge Funds Are Dumping Acacia Research Corporation (ACTG)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Acacia Research Corporation (NASDAQ:ACTG) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Acacia Research Corporation (NASDAQ:ACTG) the right investment to pursue these days? The smart money is taking a pessimistic view. The number of long hedge fund positions decreased by 5 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as DTS Inc. (NASDAQ:DTSI), Gores Holdings Inc (NASDAQ:GRSHU), andBanc of California Inc. (NASDAQ:BANC) to gather more data points.

Follow Acacia Research Corp (NASDAQ:ACTG)

In the 21st-century investor’s toolkit, there is a multitude of metrics market participants employ to appraise publicly traded companies. A duo of the most useful metrics is composed of hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the market by a very impressive margin (see the details here).

Keeping this in mind, we’re going to analyze the fresh action regarding Acacia Research Corporation (NASDAQ:ACTG).

What have hedge funds been doing with Acacia Research Corporation (NASDAQ:ACTG)?

Heading into Q4, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -31% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exist a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Trigran Investments, managed by Douglas T. Granat, holds the most valuable position in Acacia Research Corporation (NASDAQ:ACTG). Trigran Investments has an $10.9 million position in the stock, comprising 3.4% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, holding an $5.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Seeing as Acacia Research Corporation (NASDAQ:ACTG) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exist a select few money managers who sold off their entire stakes last quarter. At the top of the heap, Bill Miller’s Legg Mason Capital Management cut the biggest investment of the 700 funds followed by Insider Monkey, totaling close to $1.6 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also dumped its stock, about $1.3 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 5 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Acacia Research Corporation (NASDAQ:ACTG). We will take a look at DTS Inc. (NASDAQ:DTSI), Gores Holdings Inc (NASDAQ:GRSHU),Banc of California Inc. (NASDAQ:BANC), and Rentech Nitrogen Partners LP (NYSE:RNF). This group of stocks’ market caps match ACTG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DTSI 12 94946 -1
GRSHU 16 156178 16
BANC 17 82346 0
RNF 5 8022 0

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $62 million in ACTG’s case. FirstBanc of California Inc (NASDAQ:BANC) is the most popular stock in this table. On the other hand, Rentech Nitrogen Partners LP (NYSE:RNF) is the least popular one with only 5 bullish hedge fund positions. In comparison, Acacia Research Corporation (NASDAQ:ACTG), with 11 bullish hedge fund positions, is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are collectively most bullish on. In this case, BANC might be a better alternative.